EU is “not too reliant on the US” for LNG; looks to more gas supplies from Azerbaijan

The European Union’s imports of US LNG have climbed to their highest levels in two years, making it the largest LNG supplier to the region since Russia curtailed pipeline gas deliveries to the region after its invasion of Ukraine in 2022. But the bloc’s Energy Commissioner Kadri Simson says it hasn’t swapped its dependence on Russian pipeline gas for US LNG.

“No, we are not too reliant on the US," Simson told Kpler in an interview. “One of the main objectives of our REPowerEU Plan is to diversify energy imports and not rely on one single supplier.”

The EU launched its REPowerEU Plan in May 2022 to overcome the region’s dependence on Russian fossil fuel imports by saving energy, diversifying energy supplies and producing clean energy as a response to Russia's curtailment of pipeline gas supplies to the region following its invasion of Ukraine.

According to Kpler data, the 27 member states of the EU (EU-27) imported 38.76 mt of LNG in the first five months of this year, with the US, its largest supplier accounting for 17.63 mt, or about 45.5% of that volume. The US LNG receipts are higher compared to the corresponding period a year earlier when the EU-27 received 17.51 mt of US LNG, constituting about 41% of total imports of 42.35 mt over the period.

Last year, the US supplied 43.68 mt of LNG to EU, accounting for the majority, or about 44%, of the EU's imports totalling 99.64 mt.

Simson highlighted that while the US has supplied the most LNG, Norway was the largest supplier of pipeline gas and LNG to the EU both last year and for the year to date. The EU received 1.9 mt of LNG from Norway for the year to date, and 3.65 mt in 2023 up from 2.19 mt in 2022 but down from a peak of 3.89 mt in 2019, according to Kpler data.

The higher overall imports indicate that “over the short term, it is essential to secure more immediate energy needs,” she said, stressing that “the EU does not jump from dependence on one supplier, Russia, to another.”

According to Kpler data, the EU-27’s LNG imports from Russia have also grown since 2022, making Russia the region’s second-largest supplier after the US. Kpler data indicate that between January and May, the EU-27 received 8.1 mt of LNG from Russia, constituting about 21% of total imports over the period. This is up from 7.06 mt over the same period last year.

Simson highlighted that while almost half of the EU’s pipeline gas and LNG came from Russia in 2021, that figure dropped to 15% last year. Russia supplied the EU with 15.18 mt of LNG last year, little changed from 2022 when it supplied 15.21 mt, according to Kpler data.

“Overall, for me, it is clear that Russia is an unreliable partner…wherever possible, their imports should be replaced, and the EU has just that planned,” she said. The EU has a target to completely phase out Russian fossil fuel imports by 2027. And, in March, Simson said the EU “must end this year with even less Russian gas in our system than the year before.”

EU member states met in May to discuss the fourteenth, and latest, sanctions package on Russia, including options to restrict Russian LNG imports and re-exports. They are expected to finalize the package in June.

LNG and pipeline gas imports from the United States, Norway, UK, Azerbaijan and countries in North Africa, coupled with expanded regasification capacity in the EU, have been key in helping to replace lost Russian piped gas supplies, Simson said. And the EU is looking to Azerbaijan for further gas supplies, in an effort to further diversify gas supplies away from Russian fuels.

“The aim is to increase Azerbaijan’s gas export to the EU in the next few years, all the while advancing the overall energy transition in this crucial decade,” Simson said. “This is in accordance with our REPowerEU Plan and the Memorandum of Understanding on a Strategic Partnership in the field of energy signed by President Aliyev and President von der Leyen in July 2022.”

She said Azerbaijan is expected to increase its gas deliveries to the EU to 20 billion m3 by 2027, up from 11.8 billion m3 in 2023. Both the EU and Azerbaijan remain committed to the bilateral trade target.

“We are making solid progress on upgrading downstream infrastructure to extend the reach of Azerbaijani gas within the EU,” Simson said. “The European Bank for Reconstruction and Development (EBRD) is also looking into investment possibilities for more mid-stream infrastructure projects.”

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